Rice set to record biggest weekly drop since 2004 as supplies jump

Two changes to contain food prices

Economist Glen Langan, whose specializations include agricultural economics, said two factors - - one psychological, the other physical - - must be set in motion to break the upward price vector for food in the developing and developed worlds.

The first, concerning trading, will occur when institutional investors, among others, "sense that outsized returns on equity are no longer possible in grains," Langan said. We're not there yet, he said, because the preponderance of evidence suggests solid emerging-market economic growth will continue through at least 2009, and probably longer.

The second, concerning arable land / space utilization, is already being set in motion, he said. If developed / developing world nations utilized space on a par with Japan, food shortages would be rare, and food prices would moderate, Langan said. What's Langan referring to? "Right of way zones, empty spaces, backyard gardens, roof top garden, and other plots," he said. "Nations, and particularly the west, don't use a lot of space. A lot of it is wasted as empty or fallow. That's going to change, as it has and will continue to change in India, and throughout the east. We'll see more of it in the U.S. and the west as food prices continue to rise."

New seeds and more-weather-tolerate / disease resistant crops will also help to slow the growth in grain and food prices. Still, Langan underscored that given consumer demand implied by the current global economic expansion, the world will still experience "at least 2-3 more years of above-trend, rising food prices before supply starts to catch up with demand."